Archive for September, 2007

How the GPhone Could Change Everything

September 11, 2007

Rumors of Google’s mobile device have been circulating for over a year now. No matter how good the device will be at release, it is undeniable that Google will face a huge challenge in entering the mobile device market. Many people think that Google will inevitably fail if they tried to enter this game. Just listen to Don Reisinger at CNET, in his post entitled Future Implications: Why the Gphone will fail.

“Google will be met with a significant amount of competition that it wields no advantage over. Cell phones are a different ballgame and if you ask me, Google is ill-equipped to play this game.”

But there is one simple way that Google could completely bypass this barrier.
Make the GPhone free.
That’s right. Imagine being able to get your very own GPhone for free! Would you get one? I would. I would even be willing to pay the shipping cost. Google’s official store could sell these puppies for $0.00 and charge a nominal shipping charge.
Apple has already sold over 1 million iPhones. I bet Google could give away 1 million iPhones in the first few days.
But how could Google possibly afford to give away so many phones? The answer is simple, and I know you all can see it coming.

Everybody uses Google to search the Internet, and Google makes 99% of its revenue from the ads that users click after performing a search. By giving away the phones for free, Google would be taking an initial loss, but the number of Google searches will increase drastically.

Google is working extremely hard right now to keep the cost of these phones as low as possible. They’re doing this by using their own Linux-based operating system instead of the expensive Windows Mobile OS. Also, Google is rumored to be in communication with multiple hardware vendors including HTC and Orange. By working with several hardware vendors, Google is forcing companies to compete for the partnership, which will lower the cost to produce the phones even further.

Think about it this way. If you owned all of the gas stations in the United States, and you were able to develop cheap and stable cars, would you give them away to anyone willing to come and pick them up?

With this approach, I think Google won’t have any problem entering the mobile space.